GM South Africa Apartheid Suit Allowed by U.S. Judge

By Karen Gullo -
Apr 18, 2014

General Motors Co. (GM), Ford Motor Co. (F)
and International Business Machines Corp. lost a bid to stop
victims from suing them in the U.S. for allegedly aiding the
former apartheid regime in South Africa.

U.S. District Judge Shira Scheindlin in Manhattan ruled
yesterday that corporations may be liable for human rights
abuses committed overseas under a law that allows non-citizens
claiming violations of international laws to sue in the U.S. She
rejected the companies’ argument that earlier court rulings
interpreting the 1789 Alien Tort Statute shield multinationals
from such lawsuits.

No principle of law supports the conclusion “that the
norms enforceable through the ATS -- such as the prohibition by
international law of genocide, slavery, war crimes, piracy etc.
-- apply only to natural persons and not to corporations,” she
said.

The U.S. Supreme Court insulated multinational companies
from at least some lawsuits over atrocities overseas when it
threw out out a lawsuit in 2013 accusing two foreign-based units
of Royal Dutch Shell Plc of facilitating torture and executions
in Nigeria.

A majority of the justices said the Alien Tort law
generally doesn’t apply to conduct beyond U.S. borders. The law
has been a favorite legal tool of human-rights’ activists
seeking to hold corporations liable in the U.S.

Selling Weapons

The plaintiffs in the South Africa case, including people
who were tortured or relatives of those killed, say the
companies knowingly helped the former apartheid regime by
selling it weapons, providing it financing and otherwise doing
business there.

Scheindlin said plaintiffs in the 12-year-old lawsuit could
seek to file an amended complaint showing that the companies’
actions touched the U.S. with “sufficient force” to overcome
the presumption that they’re not liable under the Alien Tort
law. They must also show that the defendants acted not only with
knowledge “but with the purpose to aid and abet the South
African regime’s” conduct as alleged in the lawsuit.

Racial Segregation

Apartheid, or the institutionalized system of racial
segregation, came to an end in South Africa in the early 1990s,
in a series of steps that led to the formation of a democratic
government in 1994, the U.S. Department of State says on its
website.

The case is In re South African Apartheid Litigation, 02-md-1499, U.S. District Court, Southern District of New York
(Manhattan).

To contact the reporter on this story:
Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net